It pays to read the fine print on Microsoft's Office 365 terms of service. …

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Microsoft’s Office 365 software-as-a-service makes it a lot easier for companies to deploy email and collaboration services. But there are some hidden gotchas in the terms of service: users may be told to "try again later" if they send too many emails, as ZDNet’s Ed Bott reports.

Office 365's big draw for many organizations is that it works with Microsoft's Office suite much like a local deployment of Exchange and the other Office server products would for a relatively low monthly bill. And small businesses without a dedicated IT department may be attracted to the idea of having the collaboration tools that bigger companies use for as little as $6 a month.

But that low price point can be a trap for organizations that are dependent on e-mail. As part of Microsoft’s attempt to prevent usage of the service for spam, Office 365 puts a daily cap on the number of recipients that can receive mail from each user. And once you’ve hit that wall, there’s no easy way to upgrade to a higher volume. Bott reported that he had been contacted by a reader about the cap, which is hidden deep in the terms of service.

For Office 365’s “P plan” small business accounts, that cap is 500 e-mail recipients a day—a cap that an average user may never hit, but that may pose an issue for sales and marketing people and any company sending out messages to a large mailing list. If a new CEO sends out a getting-to-know-you message to 400 customers, as happened in the case that brought the cap to Bott’s attention, they’re already close to done for the day.

And the cap isn’t on just unique recipients, either, as Bott’s reader noted—any changes in the list of recipients on a message make the addressees of that message “new” contacts. “If I send a message to you and Cc: Mary Jo Foley,” the reader wrote, “that would take up two of my allotted recipients. If I later in the day sent another message to just you, it would take up another recipient, even though I’d already sent a message to you.”

That cap isn’t advertised prominently anywhere in the plan descriptions for Office 365, but Microsoft does explicitly spell out in the Office 365 FAQ that those who opt for the small business plan won’t be able to easily step up to the larger “E” plans:

We encourage you to buy the plan family (Plans P or E) you want to move forward with in the future. If, after purchase, you decide you want a plan from a different family, you will have to cancel your subscription and then buy a different plan (e.g., cancel your subscription to Plan P and then buy Plan E). Please be aware that your data may not be preserved, and you will have to provide sign up information again.

While that doesn't make migration impossible, it certainly makes Office 365's P plan look a lot less attractive, even to very small companies that rely on email for customer service and marketing.

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Sean Gallagher
Sean is Ars Technica's IT and National Security Editor. A former Navy officer, systems administrator, and network systems integrator with 20 years of IT journalism experience, he lives and works in Baltimore, Maryland. Emailsean.gallagher@arstechnica.com//Twitter@thepacketrat